Is your college age child interested in applying for a student credit card? Are you concerned about their ability to manage their spending in a responsible manner? Are you hesitant about co-signing?
There’s no denying the fact that co-signing on a student credit card for your child is a big decision. Not only are you on the hook if something goes wrong, but you may also have legitimate concerns about your child’s ability to manage their spending.
However, there are five reasons to strongly consider this:
1. Your Child Needs Your Help
Unless your child is over the age of 21 and/or has an independent source of income, they won’t be able to apply for a student credit card.
The only way they can do so is with a co-signer, and you’re the obvious choice as their parent.
If you have concerns about their overspending, set rules upfront to protect against this.
2. It’s Good for Their Credit History and Score
Think back to your time as a college student and shortly after graduation. Do you remember how hard it was to get by without a strong credit history and score?
With a student credit card, your child can start building their history while they’re in college. Subsequently, when they graduate, they’ll be in position to hit the ground running.
3. Great for Emergencies
As the parent of a college student, you’ll never stop worrying. It’s safe to say you’ll have many concerns, ranging from poor grades to a lack of a healthy diet. And that’s just the start.
A student credit card is the perfect financial tool for emergencies. For example, if your child’s car breaks down, they can use their credit card to pay for repairs. Or if your child needs to purchase books or other school supplies, they have an easy way of doing so.
Tip: make sure your child knows what’s considered an emergency and what’s considered an unnecessary expense.
4. Teach Responsibility
At some point, your child will have to learn about financial responsibility. If this doesn’t happen while they’re in college, it’s sure to come to light shortly after graduation.
With a student credit card, you can oversee their finances while they learn how to act in a responsible manner. This puts them on the right path to success when they graduate, land a job, and need to manage their own money.
It’s not the best reason to co-sign for a student credit card, but it’ll definitely work in your favor.
For example, it can be a challenge to mail money to your child when they need it. The same holds true for depositing money into their bank account.
With a credit card, this is never a concern. You don’t have to do anything outside of regularly reviewing the account to protect against overspending.
If your child asks you to co-sign on a student credit card, don’t immediately turn them down. Learn more about why they want it, while also keeping the five reasons above in mind. This could be a good decision for the both of you.